LETTER: Supply, demand drives gas pricesSo far the Republicans have tried just about everything to discredit President Obama.
To the Editor:
So far the Republicans have tried just about everything to discredit President Obama.
They said he was a Muslim, a Kenyan, he’s not a citizen, he’s a Socialist, a Communist, a Nazi, he wants to impose sharia law, he’s ruining the economy, he’s making war on religion...on and on...and nothing sticks.
Now he is being blamed for the rise in gas prices. Now, before I attempt to defend the president on this one, let me try to explain one of the most basic rules of economics, supply and demand. This rule says when demand of a product (in this case oil) goes up, the supply will in turn fall and prices will rise.
On the other hand, if demand of the same product (oil) goes down, supplies will go up and prices will fall. Now here’s the rub: we have a huge supply worldwide of oil, and demand has actually been falling for the past decade. At least here in the U.S. it has, but demand has gone up in India and China. This leads one to suspect that some other factor is in play … hmmmmm what could that be? Could it be speculators manipulating the prices?
Just like what happened in summer of 2008, when gas was more than $4 a gallon all across the country, then the entire economy tanked and prices dropped. People tried to blame that on George Bush — didn’t work then, won’t work now.
The speculators have pretty much figured out where the breaking point is for the American consumer, somewhere in the $4 to $5 range. It’s probably a little higher than it was in ‘08, because now we’re not as shocked as we were then when prices rise.
The speculators will push the price to the breaking point, then like they did before, take their profits and get out for a while.
I have no idea who does the speculating, although I have seen articles mentioning our old friends the oil and chemical guys the Koch Bros. being involved, but who really knows? The Republicans are saying the president should do something about it. What do you think they’d say if he did? They would say he’s interfering with the free market and doggone it that’s just plain old Socialism.